Raw Materials Work in Process

Beg bal 27,700 Beg bal 28,900

342,000 DM 273,600

346,800 DL 257,400 830,000

App MOH 316,800

End bal 32,500 End bal 46,700

MOH Finished Goods

Beg bal 72,600

324,900 316,800 812,000

830,000

8,100 8,100

End bal 90,600

Cost of goods sold

812,000

8,100

Adj bal 820,100

Additional information:

a) Sales for the year totalled $1,680,000

b) Total salaries and wages for the year of $512,000 were incurred, including $257,400 in direct labour and $124,200 in indirect labour.

c) Manufacturing overhead was applied at $16 per direct labour hour.

d) Actual Manufacturing overhead consisted of indirect materials, indirect labour, depreciation on factory equipment $86,000 and factory utilities.

d) Total operating expenses were $397,800 for the year. These consisted of salaries and wages, depreciation on administrative equipment $36,000, utilities, $17,800 and other expenses.

e) The income tax rate is 16%.

Required:

(i) Was the manufacturing overhead over-applied or under-applied, and by how much?

(ii) What was the cost of indirect materials for the year?

(iii) What was the direct labour wage rate per hour?

(iv) What was the factory utilities cost for the year?

(v) What was the amount of other operating expenses for the year?

(vi) Prepare a schedule of cost of goods manufactured for the year using the template below.

Birchwood Industries

Schedule of Cost of Goods Manufactured

year ended December 31, 2021

Direct Materials

Beg RM Inventory

Add: RM Purchases

RM available for use

Less: End RM Inventory

RM used for production

Less: Indirect Materials

Direct Materials

Direct Labour

Manufacturing Overhead

Indirect Materials

Indirect Labor

Dep

Utilities

Total Manufacturing Overhead

Total Manufacturing Costs

Add: Beg WIP

Less: End WIP

Cost of Goods Manufactured